Articles Posted inPuerto Rico Bonds

Leon Vaccarelli allegedly defrauded a total of nine clients out of more than $1 million

In May, former financial advisor Leon Vaccarelli was charged with 12 counts of fraud and money laundering in a federal court in Connecticut. If convicted on all of them, he could receive a maximum penalty of 210 years in prison. After pleading not guilty, Vaccarelli was released on a $100,000 bond.

Vaccarelli is alleged to have stolen money from several clients between 2011 and 2017. During that time, he reportedly informed his clients that their money would be invested in different places, including money market accounts and retirement products. What Vaccarelli actually did, according to investigators, was put the money into his own account and use it to pay his own expenses. In addition, federal prosecutors also say that he also used client money to make interest payments to other investors.

A current client dispute relating to Jeffrey Hawley (CRD #1131302) has been filed against Wells Fargo. Hawley is a registered broker currently with Wells Fargo Clearing Services, LLC (CRD #19616). Hawley is also a registered investment advisor with the same company.

The customer dispute centers on Puerto Rican bonds, which were popular to sell to investors for their high returns. When the island declared bankruptcy in May of 2017, many investors accounts decreased dramatically.

The client alleges that Hawley recommended purchasing these bonds in 2012, and to “thereafter hold the bonds.” The case is currently listed as pending.

His previous employers include Herbert J. Sims & Co. Inc. (CRD #3420) and Wien Securities Corp. (CRD #10467.) He has been in the industry since 1994 moving from H.J. Sims to Stoever in 2018.

Goodman has three customer disputes in his career, with the most recent filed on April 3, 2018. The customer alleges “high pressure sales,” unsuitable investments, fraud and negligence, and is requesting damages in the amount of $25,000.

We recently wrote about securities arbitration claims our securities attorneys are handling involving former Morgan Stanley broker Angel Aquino, (CRD #2687333), while he was a stockbroker with Morgan Stanley. He resigned from the company in July of 2017 after multiple customer complaints and securities arbitration claims. Current customer disputes filed against Aquino currently add up to nearly $12 million. A new related complaint was filed on May 8, 2018 against Aquino and Morgan Stanley (CRD #149777.) He is not currently registered as a broker, and no current employment information is available. Morgan Stanley continues to be subject to multiple claims relating to its recommendation and sale of Puerto Rico bonds.

The complaints stem from Aquino’s heavy emphasis on investments in Puerto Rico Cofina bonds. These are backed by the island’s sales tax revenue, and have triple-tax-free status. They became a popular investment for Wall Street banks to sell to retirees and other investors, but when things changed, the bonds didn’t pay as much and many advisors allegedly failed to disclose the risks with the bonds. But Aquino continued to sell his customers heavily on Puerto Rico bonds, even while they lost money.

Puerto Rico filed for bankruptcy in May of 2017 for relief of $70 billion in municipal debt. On September 20, 2017, Hurricane Maria swept through the island and destroyed crops, damaged aging infrastructure and flooded the cities. No clear path exists for Puerto Rico to meet its debt obligations.

Larry Wolfe is barred from association with any FINRA member in any capacity. Respondent failed to request termination of his suspension within three months of the date of the Notice of Suspension; therefore, he is automatically barred from association with any FINRA member in any capacity.

Wolfe consented to the sanctions and to the entry of findings that he exercised discretion in the accounts of customers, by submitting sell orders to sell one particular security in each customer account without obtaining prior written authorization from the customers or written approval of the accounts as discretionary from his member firm.